Now, the defending parties are either gone (Excite) or mere shadows of their former selves (Netscape), but Playboy intends to pursue the suit anyway. This case is not an anomaly, as Stephanie Olsen points out in her piece covering it. Google, among others, has been the target of several suits, and has recently asked the courts to clarify this issue, one clearly central to its business model. Late last summer, Google acquiesced to portions of an eBay request that Google not allow its advertisers to bid or buy on keyphrases that included the eBay brand.
The question here is of balance. Where and how do you draw the line as to what is a misuse of a trademark, and what is not? If we have to depend on the courts every time someone wants to use a word that also happens to be trademarked, the chilling effect on paid search could be significant.